Kotak Bank explains - Kotak Bank

Home

Services

Products

Help

Get App

About 75% people live in rural areas and are still dependent on agriculture. Naturally, agribusiness continues to be major contributor (27% of the GDP) towards India's economy.
But managing agribusiness is rather different than any other business because of multiple levels it operates on. From different types of business like basic produce, wholesales etc; to different sectors like production, transport, retailers etc. Agribusiness is interlinked with many other businesses on large, small and medium scale. Hence, most of the government polices impact directly on the agribusiness and minor shift in market sensibilities effect the business and vice versa. It is also one of the only businesses which is heavily dependant on nature, making the managing part of it even more complicated. You need to be well organized and skilled to manage agribusiness. Here is a framework to manage agribusiness effectively.

7-S IN AGRIBUSINESS MANAGEMENT

The 7-S management model of McKinsey describes the 7 factors to organize a company in a effective way. Just find the answers to the following question asked by each of the 'S' and you will be able to manage the business smoothly. Here's how you can apply it to your agribusiness.

SHARED VALUES

What is/are the core value/s and aim/s of your business?
You may be one of those who keep enough for themselves and sell the surplus, or doing it solely for profit, or doing it to keep your family tradition alive. Whatever your aim and values are, make sure you and your employees are clear about them and work towards them. It might be a good idea to have a talk with them when they join and share your vision.

STRATEGY

What is your strategy? Is it innovative enough to compete in the market.
Innovate and optimize the resources - there are lot of innovations and new techniques introduced regularly to improve Agribusiness. There are universities dedicated for this sole purpose. But most of India still operates the traditional way due to lack of funding and availability of these innovations. Innovate ways to operate better and make sure you get the best resources available.

STRUCTURE

What is your business structure? What are the different levels if any, that you are working on?
You may be at the start-up level or may have moved on to a mid-level agribusiness. Whichever level you operate on, make sure you have a proper hierarchy of management. On one hand, handling all on your own when there are too many things to handle will disturb and delay the flow of your business. On the other hand, having too many levels of management will result in the situation of too many cooks and increase your liabilities unnecessarily. You need to play smart and have just enough levels to work smoothly. A good way to achieve that is being miserly. Start with handling everything on your own. This way you will understand which job requires how many people and you can appoint the right number of people for the job.

SYSTEMS

Do you have proper system in place? Is your system understood by everyone?
Agribusiness is one of the very few businesses where a lot is depended on nature. So it is very important to have a system in place which can optimize your employees' efforts for your business. There are software and systems offered by many companies which can monitor and predict climatic conditions for your region. They also suggest tools and ways to optimize your land or other resources you may be involved with. If you require funds for small purchases to get your hands on these latest equipments, ask for a loan from a bank that are tailored to your needs. Click here to check out different loan options.

STYLE

What is the style and culture of your organization? Does it take your employees' comfort into consideration.
India's agribusiness majorly has traditional and rural employees involved. And therefore your work culture and style should compliment them to gain better results. Having too formal an approach may disengage your employees. And having too casual an approach may not be culturally acceptable with your employees. Adjust yourself to the culture. How, you may ask? Have an open mind and a local help(manager) to guide you through the region's cultural norms.

STAFF

Who are your employees? Do they have specified roles.
As mentioned above, you need to have just enough layers of management to function smoothly. And while you do that, have roles specified to each of your employees and make sure they know about it. Worse than having less employees is having employees who have no idea of what they are meant to do.

SKILLS

Are you and your employees skilled to carry out the work. If not do you have access to proper training?
- When it comes to management, you may want to consider having some academic training for yourself and your managers. Along with this, because you will deal with people, it is important to keep refreshing your skill sets in order to operate at the optimal level.
- As far as skills for your employees is concerned, have dedicated training sessions for your employees to train and retrain them on new systems, techniques and innovations. Your employees will love to learn new things, especially when it reduces their effort.

Agribusiness involves human labor to a large extent, and hence people management plays a critical role of the business. Whether it's you or a hired manager, make sure you appreciate your employees - There's hard physical labor involved in agriculture, and most of the employees are uneducated. So treating them right will not only earn you their loyalty for life, but they will work harder for you.

Check out related articles in this series.

How to manage an Agribusiness seamlessly

Latest Comments

Related Information